US Lottery Scam Extends Across 4 States

America's lottery industry has been rocked with the news that a former security director of the Multi-State Lottery Association, 52-year-old Eddie Tipton, was convicted on fraud charges after he was found guilty of fixing a jackpot in Des Moines, Iowa.

Each state uses random number generators from the Iowa-based Multi-State Lottery Association, where Tipton was working and it the reason why prosecutors believe the large scale scheme extended beyond Iowa state lines prompting investigations in another four states, at a minimum. The investigation will focus on undetectable malware that Tipton used to gain knowledge of winning numbers, which allowed him to provide them to his accomplices.

Four state lotteries, Colorado, Wisconsin, and Oklahoma and Iowa, are believed to be affected by the scheme with a total of $8 million paid to Tipton and his associates.

The scam was cracked wide open when he made the mistake of personally purchasing one of the winning tickets at a service station near the headquarters where he was employed since 2003. When surveillance video of the purchase of the ticket was released publicly to try to identify the winner, Tipton's colleagues realized who it was.

The tickets has passed through several hands before reaching a New York lawyer who attempted to claim the prize.

Tipton was sentenced to 10 years in jail, however is walking free while pending his appeal.

Local media in all four states have provided coverage as the story unfolded reporting that the scam has alarmed all 37 states that currently operate a lottery, which generates billions each year.